With this auction, the total investment cap of close to Rs 1 lakh crore in government debt securities by overseas investors have been reached. Any further investment in this category can take place only after unwinding of positions by the existing investors.

The auction was held as per Sebi regulations, which require that investment limits can be allocated through auction only of the existing investors cross 90 per cent of the overall limit.

Their total investment in government debt has reached Rs 97,025 crore on July 17, which is 97.47 per cent of the total permitted limit of Rs 99,546 crore.

Consequently, it was decided to conduct an auction for allocation of unutilised investment limits.

In the last month's auction conducted by the NSE, sale of government securities had attracted bids worth Rs 9,361 crore as against Rs 7,152 crore offered.

To boost foreign fund inflows into the capital markets here, regulator Sebi in September last year allowed overseas entities to invest in government securities without any auction till such investments reach 90 per cent of permitted limits.

Once this limit is reached, the auction mechanism now get triggered for allocation of the remaining limits.

Foreign investors have invested a net amount of over Rs 74,000 crore in debt market so far in 2014. Equity market has also seen similar trends with overseas fund inflow of over Rs 70,000 crore since the beginning of the year.